Oil prices rose this morning as traders returned to work after Saudi Arabia said Opec still plans to decrease its inventories of crude oil.
Saudi energy minister Khalid al-Falih said the oil-producing cartel had discussed rolling over production cuts into the second half of the year.
Opec, and allies including Russia, agreed to slash output by 1.2m barrels per day from the beginning of January, initially setting a six-month time frame.
The deal has helped drive up oil prices, which had been hit by a glut of US shale hitting the market.
“This second half, our preference is to maintain production management to keep inventories on their way declining gradually, softly but certainly declining towards normal levels,” al-Falih said yesterday.
The price of international standard Brent crude ticked up this morning by 1.1 per cent to $73.03, more than $18 higher than when the cuts started in January and the highest point for nearly a month.
Global markets have also tightened after the US administration ramped up sanctions against Iran earlier this year.
Tensions in the Middle East and threats from Iran to close the vital Strait of Hormuz shipping lanes, came to a head last week as several attacks were launched against Saudi oil infrastructure.
Drones carrying explosives attacked two oil pumping stations close to Riyadh on Tuesday, days after unknown assailants damaged four oil tankers close to the Strait.
Saudi Arabia yesterday said it wants to avoid war, but promised to “respond with all force and determination” if Iran chooses to fight.
Last night, US President Donald Trump threatened Tehran over its belligerent rhetoric.
“If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again,” he tweeted.